| This study sought to provide a clearer insight into the dynamics of the office space market and to identify indicators that market participants can use to estimate future office space market conditions more accurately.A literature review was undertaken to assemble the existing body of knowledge, found largely in the disparate empirical models of various researchers. These models were tested, using the author's data collected in the San Francisco-Oakland Standard Metropolitan Statistical Area (SMSA), but the original research findings were not validated. Likewise, combining the previous researchers' significant variables failed to produce a satisfactory theory of the behavior of the office space market.The author's predictive model, developed for use in structural analysis and forecasting in a specific market, is grounded in finance theory. The supply (stock) of and demand for office space is explained with the following functional relationships: (1) Stock = Two advances set this study apart from those of previous researchers: the improved quality of the data and the longer time span studied. Data representing 60,445,712 square feet of office space (475 buildings) in San Francisco described a broad cross section of the market, and the anomalies that may result from a study of numerous submarket areas were avoided. The thirty-year time period was sufficiently long to include the effects of several office market cycles, identified by previous researchers as averaging seven to ten years each, while minimizing the effects of market anomalies during any particular cycle. |
